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Health and Safety

As a major international public transport operator, a commitment to the highest standards of safety is at the heart of our business. We strictly adhere to legislative regulations in all our areas of operation. Breach of these regulations could result in criminal and/or civil legal proceedings, fines and potential loss of contracts and licences to operate. Stagecoach has an excellent safety record and we have a proactive culture across the Group that ensures the health and safety of our customers and our employees is our top priority. Health and safety is monitored and reported on across Stagecoach Group and immediate action is taken to address issues in our business processes. We have a Health, Safety and Environmental Committee that considers health, safety and environmental issues across the Group and reports to the Board on these matters. The Committee is chaired by a nonexecutive director. Safety matters are also considered at the Board and management meetings of each of our businesses. Our employees are provided with appropriate health and safety training and encouraged to report any concerns. We expect our suppliers and contractors to have a similar commitment to complying with appropriate regulations in this area.

Safety and security issues around public transport were highlighted by the terrorist attacks in London in July 2005. Stagecoach operated both of the buses that were targeted in the attacks and our employees have been commended for their response to these tragic incidents. We will continue to stress the need for vigilance by our staff and customers, while at the same time ensuring accessibility to our public transport services.

In our UK Bus division, we are working in partnership with government and other agencies to improve bus safety and security. While crime and vandalism rates are relatively low, we are aware they can discourage people from travelling on buses. Stagecoach signed the UK’s largest single order for CCTV in buses in the UK in April 2006. The £1.2m deal will ensure all new buses ordered by Stagecoach for delivery during the year ending 30 April 2007 will be fitted with state-of-the-art digital CCTV systems from LOOK CCTV. As well as assisting in our drive to increase on-board security for our passengers and employees, the systems can check the movement of traffic and pedestrians as part of an accident prevention campaign.

Stagecoach has a number of joint programmes in place with schools and the police to deter anti-social behaviour and educate the next generation of public transport users. We are also working with a number of local authorities in areas such as Oxford, Mansfield, Cheltenham and Gloucester to develop late night bus networks to help reduce town centre crime. At an operational level, we have in place a process of route risk assessments to identify potential safety issues. As well as our own investment in ongoing driver training, we are supporting the work of the Road Operators’ Safety Council to drive up standards in the industry. Stagecoach has also helped fund safety campaigns focused on other road users, including cyclists and drivers of agricultural vehicles.

South West Trains (“SWT”) is involved in the ground-breaking TravelSafe Officer security and anti-crime partnership with British Transport Police. The initiative continues to help reduce crime across the network and SWT has also received 47 Secure Station awards, more than any other train operating company. The successful withdrawal of Mark 1 rolling stock and the full introduction of the Desiro fleet has helped deliver a safer and more secure railway. Passengers are also benefiting from CCTV improvements and better lighting at 53 South West Trains stations within the London area. Work has also been undertaken to further enhance SWT’s Safety Management System, supported by training and briefing programmes for employees. Implementation of our Engineering Competency Management System is also continuing. As well as improved contractor management, SWT has developed a new safety training programme for trade union health and safety representatives. This total commitment to safety led to SWT winning the Sir Robert Horton Safety Award at the National Rail Awards in 2005.

In North America, we continue to meet or exceed all Federal and State regulations in the area of safety. Regular safety audits are carried out at our facilities to ensure high standards of health and safety are maintained. We have enhanced our driver recruitment and training policies, as well as reducing the maximum permitted continuous hours of service for drivers, as part of our commitment to a safe, well-rested team. Management performance incentives include targets related to the reduction of preventable accidents. The management team in the United States has continued to support the work of the Federal Government and other agencies in implementing anti-terrorism measures. We have now installed GPS tracking in more than 1,000 coaches for security and monitoring purposes. In Canada, we have a dedicated Occupational Health and Safety Policy Committee whose members are drawn equally from management and workforce representatives.

Public transport – whether by bus, coach, train or tram - remains the safest way to travel. Stagecoach Group itself has a good safety record, but we are not complacent and we constantly keep our safety arrangements under review.

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